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intercst: Very interesting article you cited... I liked it! It reaffirms my own attitude that discourages clients from borrowing from life insurance policies (as well as 401k & 403b account) unless absolutely necessary; and only for a short period of time, with the intention of repaying the loan.

I don't have a problem with a person withdrawing accumulated dividends from a whole life policy, or withdrawing gain from a VUL (both allowed up to the "basis" amount without tax consequences), but to turn to loans as a means of avoiding taxes can result in the situation Opal M. had in the Times article.

The plan to borrow from policy value to provide income beyond the extraction of the policy's "basis" should be done very carefully! I don't think FoolWAM would recommend it for many... Regards, PP
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